Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), has revealed that automakers operating in the UK are thinking about new models but have not yet made firm investment choices. Their reluctance is clearly connected to the government’s zero emission vehicle mandate, a policy that demands a growing proportion of electric car sales each year until 2030.
The British motor industry has pushed hard for Labour to modify this regulation. Business Secretary Jonathan Reynolds has suggested that the government is expected to tone down the mandate. Hawes has confirmed this change is the main cause of the investment delays. 'There’s investment decisions on next model, next generation, which need a resolution,' he said.
Industry under pressure from global factors
The push to ease the mandate follows challenges facing the UK auto sector, including competition from Chinese companies, new tariffs from the US, and the high costs linked to switching to electric technology. In the first half of 2026, UK vehicle production dropped 7.5% from the previous year, with 386,000 cars and commercial vehicles produced, according to SMMT data released on Thursday.
Environmental and regulatory resistance
The electric vehicle charging sector has spoken out against any modifications to the mandate, saying it would slow down the shift to cleaner transportation. Environmental organizations are equally concerned, warning that loosening the rules could result in millions of extra tonnes of carbon emissions. Hawes did not mention specific companies awaiting policy shifts but hinted that Toyota and Mini might be among them.
Broader trade concerns cloud future
Additional issues, especially the UK’s ongoing trade negotiations with the EU, could influence investment plans. Without a trade deal with Brussels, carmakers might have to pay import tariffs from their biggest export market if they don’t meet the EU’s battery sourcing requirements.
Hawes pointed out that the EU trade relationship is a major focus for Reynolds, noting a recent conversation soon after the business secretary took office last week. Reynolds has long supported the automotive sector and acknowledged during a Wednesday interview with the Financial Times that the mandate will likely need to be adjusted to stop manufacturers from shifting their operations out of the UK.